VA Loan Gift Funds: What You Need to Know
Can my girlfriend/boyfriend give me money to buy a house?
The
VA allows Veterans to obtain gift money to help with the
purchase of a home. There cannot be any repayment
arrangements between the donor(s) and Veteran.
The gift funds transfer from the donor to the Veteran
must be carefully documented. The donor and Veteran are
required to sign a form that states the amount of the
gift funds and declares that there are no repayment
arrangements.
Who can gift funds for a VA loan?
It is possible to receive a gift toward your home
purchase from almost anybody, but there is one key
stipulation: the gift cannot be
from someone who has an interest in the transaction.
An interested party is someone who has an interest in
your transaction and is involved in it in some way, such
as a builder or developer, another broker, a real estate
agent, or even the seller himself. Although, sellers are
permitted to provide a sales concession. You may also
use gift money as part of your down payment if desired.
Friends and family members may “donate” money to the
buyer in order for them to be able to afford the charges
associated with the purchase. For a VA loan, however,
there are specific conditions that must be met before a
gift money may be used.
VA Loan Gift Funds Requirements
Any gift funds donated must be accompanied by a gift letter signed by both the donor and borrower. The letter of gift must include the following information:The relationship between the donor and the borrower, and declare that no repayment is required.
The donor's name, address, and phone number are used to specify the financial value of the contribution.
The lender may offer you with a blank gift letter.

Frequently
Asked Questions (FAQs)
Q. Are gift funds allowed on a VA
loan?
A. Yes, provided the donor (person giving the gift
money) is not a party to the transaction.
Q. Does the VA allow gift funds
for reserves?
A. In most cases, the Veteran does not need cash
reserves, however, the borrower must have 3 months of
PITI documented for each property in order for the
rental income to be considered if the borrower owns
several properties.
Gift money are not permitted to be utilized to satisfy
reserve requirements.
Chapter 4: Credit Underwriting
SOURCE: VA Pamphlet 26-7, Revised Chapter 4: Credit Underwriting
Conclusion
In conclusion, VA loan gift funds are a great way to help a veteran or military family purchase a home. The process is simple and there are many options for getting the money you need. Be sure to consult with a lender to find the best way to use your gift funds and get into your dream home!